The Indian government has decided to offer the Term Insurance coverage under the Pradhan Mantri Jan Dhan Yojana. It has several riders and for beginners, Rs 30,000 term cover would be limited to just one accountholder per family. That one accountholder should be the family head or a breadwinner and must be in the age group of 18 to 59.
The nominee will have to end the term coverage mandatorily at the age of 60 years. Currently, the life insurance cover is available for a period of 5 years till 2019-20 and then it will be revised. As per the eligibility standards, term insurance would be available only to those people who are opening a bank account for the very first time between 15th August 2014 and 26th January 2015.
In fact, the person should have a biometric card and valid RuPay card associated to the account or in the procedure of being connected to the bank account. Also, the Centre has excluded different segments of people from the plan, including State and Central government staff, employees whose income is taxable under the Income Tax Act, 1961 or TDS is being cut down from the income and their families.
People included under Aam Aadmi Bima Yojna covers around 48 professions mentioned under the plan and their families have been excluded as well. Other eligible account holders who have term coverage on account of any other scheme of banks against the account will have to select between these two coverages.
The scheme is introduced with the intent of empowering the people financially by opening banks accounts for two people in every household. Plus, these accountholders to be offered an accidental coverage of Rs one lac, an overdraft facility and a RuPay debit card.
The Indian government has targeted around 7.5 crore households under the plan. Till date, nearly 9.04 crore accounts have been opened with total deposits of Rs 7,006 crore.
But, about 6.68 crore accounts remain dormant. LIC is responsible for the term insurance coverage through a certain fund for the purpose that has an initial corpus of Rs 100 crore from the Social Security Fund.